Following Avianca Holdings' filing for Chapter 11 restructuring on May 10, the US Bankruptcy Court for the Southern District of New York has given the Panama-based group interim approval to "first day" motions, enabling it to continue operations.
Collectively, the orders which the court granted at the hearing "will help ensure that Avianca continues normal business operations throughout the reorganisation process," the company said in a statement on May 12.
The approval enables the group to "pay certain employee wages" and benefits, honour obligations to travel agencies, vendors, and suppliers, and maintain operational continuity, according to the statement.
"Customers can continue to arrange travel and fly with Avianca in the same way they always have," the group clarified.
In parallel to its Chapter 11 filing, Avianca is also commencing the liquidation of its Avianca Perú operations, which "will allow Avianca to renew its focus on core markets" when it emerges from bankruptcy protection.
avianca airlines (AV, Bogotá) and its affiliated carriers, such as Avianca Costa Rica, Avianca Ecuador, Aviateca Guatemala, El Salvador's TACA International Airlines, Honduras' Isleña Airlines, Mexican cargo carrier AeroUnion, and Colombia's TAMPA Cargo, will continue to operate for the duration of the Chapter 11 proceedings.
Avianca said it would continue to seek financial support from the governments of the countries where it operates and continues financing talks with the government of Colombia. It will return to the bankruptcy court on June 11, when it hopes to secure the approval of all interim orders on a final basis.
"The Chapter 11 process is a responsible way for Avianca to protect and preserve the company as we navigate the severe impact of Covid-19 on the airline and travel industries," Avianca CEO Anko van der Werff said.
